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When Small Is Large: Microcredit And Economic Growth

Microcredit is truly a win-win proposition for financial development, boosting earnings and adding jobs for individuals, diversifying the regional economy while lowering government assist costs and increasing government revenues. The significance of small business to the health of the financial system, especially in tough instances, brings home the potential for microcredit to assist individuals in turning challenges into opportunities.

The government guarantee, which usually covers 75% to 90% of the loan, eliminates much of the chance for the lender. SBA loan phrases also are usually extra favorable to borrowers. The downsides are that extra paperwork must be filed, further charges must be paid, and it takes longer to get approved. You could also have to fulfill stricter necessities to qualify for a loan from a traditional SBA lender.

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